Section 3(4) of the Administration of Justice Act 1956, known as the “sister-ship” provision, runs as follows:

“In the case of any such claim as is mentioned in paragraphs (d) to (r) of s. 1(1) [of the same Act], being a claim arising in connection with a ship, where the person who would be liable on the claim in an action in personam was, when the cause of action arose, the owner or charterer of, or in possession or control of, the ship, the Admiralty jurisdiction of the High Court may … be invoked by an action in rem against

This is not the easiest of enactments to interpret. Two particular problems arising out of it are dealt with in the recent decision of Sheen, J., in The Maritime Trader.1 These are, first, whether under its terms an owner or disponor of a ship under time charter who is not paid his hire can enforce his claim thereto by arresting another ship actually owned by the charterer; and second, how the sister-ship action fits in with the concept of the one-ship subsidiary holding company.

The facts of The Maritime Trader were fairly straightforward. The plaintiff chartered the m.v. Antaios to Maritime Transport Overseas. G.m.b.H. (M.T.O.). The charterers allegedly failed to pay the hire, on which the plaintiffs sought to arrest in an English port the Maritime Trader. This vessel was owned not by M.T.O. but by its wholly-owned subsidiary, Maritime Trader Shipholding G.m.b.H. (M.T.S.); the plaintiffs alleged nevertheless that s. 3(4) gave them the right to arrest it. Sheen, J., however, disagreed and set aside the proceedings against the Maritime Trader. Section 3(4) could not, he held, be used to enforce a claim for unpaid hire. Nor did it allow the arrest of any ship not actually owned by the same person as the vessel in respect of which the claim arose, even though the vessel arrested was owned by a wholly-owned subsidiary of the other owners.

Sheen, J.’s first holding is, with respect, completely sound. It turns on the meaning of the requirement in s. 3(4) that the person whose ship it is sought to arrest must have been the owner or charterer of the ship the claim arose out of. While at first sight this